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Transparency of managed accounts
Managed accounts issue quarterly, and sometimes
monthly, reports to accountholders showing: |
| Exactly which securities you
hold |
| The number of shares you own |
| The current value of each security
and of your total account |
| The cost
basis
of each security |
| Details of account activity
(like purchases, sales, and dividends
paid out or reinvested) |
| Your portfolio's asset
allocation |
| Your portfolio's performance
in comparison to a suitable benchmark |
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If you have more than one managed account, you'll
receive separate reports that include market analysis and near-term
forecasting provided by the investment managers. Your financial
adviser will compile the information from the various sources
to use as the basis of an ongoing assessment of the accounts you
own.
A continuing debate
Some investment advisers emphasize the benefits
of transparency when they recommend managed accounts. They argue that, in contrast,
mutual funds disclose their holdings just twice a year in their annual
and semi-annual reports
and provide much less detail
about their underlying
securities.
showing only how many shares are held
and their value as of the report date.
These advisers point out that by the time the
report is published, the portfolio may have changed. In fact,
they argue that some funds purchase particular investments in
order to present them as part of their portfolio and sell them
shortly after the list is compiled, a practice known as window
dressing. |
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